Mail order

Mail order is the buying of goods or services by maildelivery. The buyer places an order for the desired products with the merchant through some remote method such as through a telephone call or web site. Then, the products are delivered to the customer. The products are typically delivered directly to an address supplied by the customer, such as a home address, but occasionally the orders are delivered to a nearby retail location for the customer to pick up. Some merchants also allow the goods to be shipped directly to a third party consumer, which is an effective way to send a gift to an out-of-town recipient.

A mail order catalogue is a publication containing a list of general merchandise from a company. Companies who publish and operate mail order catalogues are referred to as cataloguers within the industry. Cataloguers buy or manufacture goods then market those goods to prospects (prospective customers). Cataloguers may "rent" names from list brokers or cooperative databases. The catalogue itself is published in a similar fashion as any magazine publication and distributed through a variety of means, usually via a postal service and the internet.

Sometimes supermarket products do mail order promotions, whereby people can send in the UPC plus shipping and handling to get a product made especially for the company.

In 1498, the publisher Aldus Manutius of Venice printed a catalogue of the books he was printing. In 1667, the English gardener, William Lucas, published a seed catalogue, which he mailed to his customers to inform them of his prices. Catalogues spread to colonial America, where Benjamin Franklin is believed to have been the first cataloguer in British America. In 1744 he produced a catalogue of sold scientific and academic books.[1]

The British entrepreneur Pryce Pryce-Jones set up the first modern mail order in 1861.[2][3] Starting off as an apprentice to a local draper in Newtown, Wales, he took over the business in 1856 and renamed it the Royal Welsh Warehouse, selling local Welsh flannel.

The establishment of a national postal service from the 1840s, and the extension of the railway network to Newtown, helped to eventually turn his small rural concern into a company with global renown. In 1861, Pryce-Jones hit upon a unique method of selling his wares. He distributed catalogues of his wares across the country, allowing people to choose the items they wished and order them via post; he would then dispatch the goods to the customer via the railways. It was an ideal way of meeting the needs of customers in isolated rural locations who were either too busy or unable to get into Newtown to shop directly. This was the world's first mail order business, an idea which would change the nature of retail in the coming century.[4]

The further expansion of the railways in the years that followed allowed Pryce Jones to greatly expand his customer base and his business grew rapidly. He supplied his products to an impressive variety of famous clientele, including Florence Nightingale and Queen Victoria, the Princess of Wales and royal households across Europe. He also began exporting drapery to the US and British colonies.[5]

One of his most popular products was the Euklisia Rug,[6] the forerunner of the modern sleeping bag, which Pryce-Jones exported around the world, at one point landing a contract with the Russian Army for 60,000 rugs.[7] By 1880, he had more than 100,000 customers and his success was rewarded in 1887 with a knighthood.[8]

The cover of the first Eaton's catalog, published in 1884. The Eaton's catalog would continue to be published until 1976.

In 1845, Tiffany's Blue Book was the first mail-order catalogue in the United States.[9][10]

In 1872, Aaron Montgomery Ward of Chicago produced a mail-order catalogue for his Montgomery Ward mail order business.[11] By buying goods and then reselling them directly to customers, Aaron Montgomery Ward was consequently removing the middlemen at the general store and to the benefit of the customer, lowering drastically the prices.[12]

His first catalogue was a single sheet of paper with a price list, 8 by 12 inches, showing the merchandise for sale and ordering instructions. Montgomery Ward identified a market of merchant-wary farmers in the Midwest. Within two decades, his single-page list of products grew into a 540-page illustrated book selling over 20,000 items.

From about 1921 to 1931, Ward sold prefabricated kit houses, called Wardway Homes, by mail order.[13]

Hammacher Schlemmer is the earliest still surviving mail-order business, established by Alfred Hammacher in New York City in 1848. Offering mechanic's tools and builder's hardware, its first catalogue was published in 1881.[14]

T. Eaton Co. Limited was founded in 1869 in Toronto by Timothy Eaton, an Irish immigrant. The first Eaton's catalogue was a 34-page booklet issued in 1884. As Eaton's grew, so did the catalogue. By 1920, Eaton's operated mail order warehouses in Winnipeg, Toronto and Moncton to serve its catalogue customers. Catalogue order offices were also established throughout the country, with the first opening in Oakville in 1916.

Organizing the company so it could handle orders on an economical and efficient basis, Chicago clothing manufacturer Julius Rosenwald became a part-owner in 1895. By the following year, dolls, refrigerators, stoves and groceries had been added to the catalog. Sears, Roebuck and Co. soon developed a reputation for high quality products and customer satisfaction. By 1895, the company was producing a 532-page catalog with the largest variety of items that anybody at the time could have imagined. "In 1893, the sales topped 400,000 dollars. Two years later they exceeded 750,000 dollars."

In 1906 Sears opened its catalog plant and the Sears Merchandise Building Tower.[16] And by that time, the Sears catalog had become known in the industry as "the Consumers' Bible". In 1933, Sears, Roebuck and Co. produced the first of its famous Christmas catalogs known as the "Sears Wishbook", a catalog featuring toys and gifts and separate from the annual Christmas Catalog.

From 1908 to 1940, Sears also sold kit houses by mail order, selling 70,000 to 75,000 such homes, many of which are still lived in today.[17]

The Outlook, American magazine advertisement from 1916 offering mail delivery of fish and seafood.

By creating a direct marketing industry through the mail order catalogue, Pryce Pryce-Jones and Aaron Montgomery Ward enabled the creation of a powerful global network that came to include everything from mail order, to telemarketing and social media.[12] Mail order changed the worldwide marketplace by introducing the concept of privacy and individuality into the retail industry.[18] Today, the mail order catalogue industry is worth approximately 100 billion dollars[18] and generates over 2 trillion in incremental sales.[12]

Sir John Moores was a British businessman and philanthropist most famous for the founding of the Littlewoods retail company that was located in Liverpool, England. Moores became a millionaire through the creation of the Littlewood Pool, one of the best-known names in sports gambling in England.

In January 1932, Moores was able to disengage himself sufficiently from the pools to start up Littlewoods Mail Order Store. This was followed on July 6, 1937 by the opening of the first Littlewoods department store in Blackpool. By the time World War II started there were 25 Littlewoods stores across the UK and over 50 by 1952.

The first Littlewoods catalogue was published in May 1932 with 168 pages. The motto of the catalogue was, "We hoist our Flag in the Port of Supply, and right away we sail to the Ports of Demand—the Homes of the People. We intend to help the homely folk of this country help them to obtain some of the profits made by manufacturing and trading... to save money on things they must have. This Catalogue is our Ship... staffed by an All-British crew... You won't find sleepy, old-fashioned goods carried in the LITTLEWOODS ship. Only the newest of the new goods—honest, British-made merchandise."[19]

With the success of the catalogue business, Moores moved his business four times to larger buildings in 1932. Moores sailed to America to look at the operations of Montgomery Ward and Sears and Roebuck. By 1936, the business had hit the 4 million pound mark, making Moores a millionaire a second time over, by mail order.[19]

James Cash Penney started his first retail store in 1902 in Kemmerer, Wyoming. By 1925, J.C. Penney had 674 stores generating sales of $91 million. In 1962 J.C. Penney bought Wisconsin based General Merchandise Company with discount stores and a mail-order operation. Thus J.C. Penney entered the mail order catalogue business. J.C. Penney, a latecomer in catalogue operations, was different from many of its competitors because it had a large retail store base before launching into the mail-order business. The first J.C. Penney catalog was mailed the next year in 1963. Customers could order from the catalog inside J.C. Penney stores in eight states. The J.C. Penney Catalog Distribution Center was located in Milwaukee.[20]

Mail order had always relied on the innovative technique of selling products directly to the consumer at appealing prices,[12] but the term "direct marketing" was only coined in 1967, by Lester Wunderman — considered to be the father of contemporary direct marketing. He was behind the creation of the toll-free 1-800 number[12] and numerous mail order based loyalty marketing programs including the Columbia Record Club, the magazine subscription card, and the American Express Customer Rewards program.[21]

With the invention of the Internet, a company's website became the more usual way to order merchandise for delivery by mail, although the term "mail order" is not always used to describe the ordering of goods over the Internet. It is more usual to refer to this as e-commerce or online shopping. But the only real difference between online shopping and traditional mail ordering is the means by which the order is placed (online vs phone or mailed order form). Most traditional mail order companies now also sell over the Internet.

However, rising paper, printing, and postage costs have caused some traditional catalogue merchants, such as Bloomingdale's, to suspend their printed catalogues and sell only through websites. Also, while some Internet merchants are or were also catalogue merchants, many have never had a printed catalogue.

Regardless, merchants have been responding to rising distribution costs, and alternatives for die hard catalog shopping fans have recently started popping up. Applications for tablet computers such as the Apple iPad allow users to browse all their favourite catalogues without actually receiving one in the mail. Not only is this a greener, more ecologically friendly alternative, but many catalogue merchants who previously relied on mail order are also finding that this alternative is just as if not even more financially effective. The most important part of all of this though, is that the style of mail order is preserved, as it provides a more brand oriented shopping experience.

The objective of the direct marketing industry is to alter the sales distribution chain, in other words [bypass] the wholesaler and the retailer and go directly to the customer, reducing therefore tariffs and taxes.[35]

In the United States, an advantage of this type of shopping is that the merchant is typically not required by law to add sales tax to the price of the goods, unless they have a physical presence in the customer's state. Instead, most states require the resident purchaser to pay applicable taxes. There has been periodic discussion about amending the law to make these sales taxable.

In the European Union, a "VAT union" is in force: the merchant selling to a buyer in a different EU member country adds the VAT of his own country to the price, and the buyer pays no additional tax. A buyer for resale may deduct that VAT, just as with purchases made within his own country. This makes the EU look more like one country than the U.S. in this respect.

Coopey, Richard, Sean O'Connell, and Dilwyn Porter. "Mail order in the United Kingdom c. 1880-1960: how mail order competed with other forms of retailing," The International Review of Retail, Distribution and Consumer Research (1999) 9#3 pp 261–273.

Emmet, Boris, and John E Jeuck. Catalogs and Counters: A History of Sears, Roebuck and Company (1950), the standard scholarly history

Heine, Irwin M. "The Influence of Geographic Factors in the Development of the Mail Order Business," American Marketing Journal (1936) 3#2 pp. 127–130 in JSTOR

Latham, Frank B. 1872-1972: A Century of Serving Consumers. The Story of Montgomery Ward (1972)